Holding all other forces constant,when the price of gasoline rises,why would the number of litres of gasoline demanded fall substantially over a 10-year period
A)Buyers tend to be much less sensitive to a change in price when given more time to react.
B)Buyers will have substantially more income over a ten-year period.
C)Buyers tend to be much more sensitive to a change in price when given more time to react.
D)Gasoline has no substitutes.

Question

Quizplus · Accepted Answer

When given more time to react, buyers tend to be more sensitive to a change in price of a good. This is because they have more opportunities to change their behavior, such as finding substitutes, adjusting their consumption patterns or upgrading to more fuel-efficient cars. Over a 10-year period, consumers may have more time to adjust, which could lead to a larger decrease in demand for gasoline in response to a price increase. Therefore, choice C is the best answer.

Holding All Other Forces Constant,when the Price of Gasoline Rises,why